The national auditor has come across glaring irregularities in execution of 94 highway projects awarded through the Public Private Partnership route that increased the cost of construction leading to an extra burden of Rs. 30,247 crore on road users on account of higher toll.
In its first such performance audit of highways projects implemented under PPP — public projects in which private capital is deployed for the benefit of economy and users — the Comptroller and Auditor General (CAG) has also come across instances galore where undue financial benefits valued at Rs. 2,928 crore was given to private developers.
Some 207 projects were awarded on PPP till March 2012.
The overall financial impact on account of delayed execution, mismanagement of funds, changing bidding parameter, awarding projects which were not unviable under PPP was to the tune of Rs. 35,675 crore.
The auditor cited how the 176-km two-laned Nagpur Betul and 70-km Lucknow-Rae Bareilly highway stretches were expanded to four lane despite low traffic which did not justify the upgradation. This resulted in extra cost of construction to the tune of Rs. 1,724 crore leading to toll fee increasing by 66% as compared to a two-laned road.
In 85 out of 94 projects, the concessionaire inflated the total project cost as compared to what was worked out by the National Highways Authorities of India up to 223% benefiting the developers. Also in case of termination the risk would have to be borne by NHAI.
Besides, NHAI also erred in allowing only tollable traffic instead of the total assessed volume of traffic in eight highway stretches awarded to developers resulting in fixing of a longer concession period. This caused road users to pay toll for a longer duration.
The CAG also came across massive delays – between 373 days to 1,946 days – in execution of projects by private developers.